TOKYO -- Tokio Marine & Nichido Fire Insurance will work with Japanese regional banks to offer a one-stop service for smaller businesses hoping to sell their "made in Japan" products in the U.S. through Amazon.com.
Japanese goods popular abroad include green tea, sake, small digital devices, and such everyday items as ceramics and kitchen knives. Small and midsize businesses excel at handling such products manufactured in low quantities but have not been able to fully tap overseas demand.
Many have shied away from exporting over high logistics costs for shipping small volumes on their own as well as hefty expenses for insurance to cover against lawsuits filed by consumers, which are common in the U.S.
The new service will attempt to pitch the "made in Japan" brand to a wider audience as the domestic market shrinks.
Tokio Marine will join with Hiroshima Bank and GlobalBrand, which helps businesses export their products, to launch the all-in-one service as early as next month.
GlobalBrand will handle such tasks as collecting merchandise from sellers in Japan, arranging shipment to Amazon warehouses in the U.S., and putting the products on sale on Amazon. It will also promote the products through social media.
The Tokio Marine Holdings unit will provide insurance to cover losses from merchandise breaking during transport or storage as well as claims for damages from consumers suing over defective items. Bunching products from multiple companies together will allow the insurer to offer lower logistics costs and insurance premiums thanks to economies of scale.
Insurance to cover lawsuits over defective products typically runs about 500,000 yen a year. Through the new service, a 50 million yen policy will charge premiums of just tens of thousands of yen.
Hiroshima Bank will encourage small and midsize local businesses to sell their wares abroad. The partners are calling on other regional banks across Japan to join.
Consumer spending in Japan grew just 0.4% in real terms in 2018. Meanwhile, cross-border e-commerce has been expanding. The U.S. will buy 1.2 trillion yen ($10.9 billion) from Japan via cross-border business-to-consumer e-commerce in 2021, up about 70% from 2017, according to the Ministry of Economy, Trade and Industry.
The U.S. was chosen as the target market for its size and Tokio Marine's existing presence there. The partners are expected to consider expansion to other markets depending on how the American business fares, given the rapid growth of cross-border e-commerce in such emerging markets as China.